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CIRCULAR

Guiding the elaboration and management of construction survey costs

Pursuant to Construction Law No. 16/2003/QH11 of November 26, 2003, passed by the XI th National Assembly at its 4th session;

Pursuant to the Government's Decree No. 16/2005/ND-CP of February 7, 2005, on management of work construction investment projects;

Pursuant to the Government's Decree No. 36/2003/ND-CP of April 4, 2003, defining the functions, tasks, powers and organizational structure of the Construction Ministry.

The Construction Ministry hereby guides the elaboration and management of construction survey costs as follows:

1. GENERAL PROVISIONS

1.1. Construction survey costs mean all expenses necessary for fulfillment of survey jobs in strict accordance with survey procedures and processes promulgated by the State. Construction survey costs elaborated under the guidance in this Circular shall serve as a basis for managing work construction investment costs.

1.2. Construction survey costs of construction investment projects funded with state budget capital, state development investment credit capital, state-guaranteed credit capital or development investment capital of state enterprises must be determined according to the provisions of this Circular.

1.3. Construction investment projects funded with capital of other sources are encouraged to apply the provisions of this Circular to elaborating and managing their construction survey costs.

2. METHOD OF ELABORATING CONSTRUCTION SURVEY COST ESTIMATES

Construction survey cost estimates are determined according to the following formula:

Cost of

Construction Volume Unit cost elaboration Makeshift Value

survey cost = [{S of each x of each } + of survey + accommodation ] + ( 1 + added )

estimate survey job survey job plan and cost tax

survey result rate

report

The above elements shall be determined as follows:

2.1. Volume of each survey job:

The volume of each survey job is determined according to the tentative plan and technical plan of the survey approved by the investor.

2.2. Unit cost of each survey job:

The unit cost of each survey job is determined as follows:

Gi = (Cti + Pi) x (1+ Lt) (1)

In which:

- Gi: Unit cost of survey job i;

- Cti : Direct cost of one volume unit of survey job i;

- Pi: General cost of one volume unit of survey job i;

- Lt: Pre-calculated taxable income.

The above elements are calculated as follows:

2.2.1. Direct cost:

Cti = Cvi + Cni + Cmi (2)

In which:

- Cti : Direct cost

- Cvi : Direct cost of materials for one volume unit of survey job i;

- Cni : Direct cost of labor for one volume unit of survey job i;

- Cmi : Direct cost of machinery and equipment used for one volume unit of survey job i;

a/ Direct cost of materials:

n

Cvi = (1 + Kpi) S Mij x Zj (3)

j=1

In which:

- Cvi : Direct cost of materials for one volume unit of survey job i;

- Kpi : Set norm of ratio of auxiliary materials to main materials of survey job i;

- Mij : Set norm of consumption of material j for one volume unit of survey job i;

- Zj : Price of material j (exclusive of VAT) transported to construction site according to the table of survey materials prices promulgated by provincial/municipal People's Committees or at market prices in localities where works are constructed.

b/ Direct cost of labor:

Cni = Ni x Li (4)

In which:

- Cni : Direct cost of labor;

- Ni : Set norm of number of workdays for one volume unit of survey job i;

- Li : Workday wage for survey job i according to the survey labor cost table promulgated by provincial/municipal People's Committees.

c/ Direct cost of machine and equipment use:

n

Cmi = (1 + Kmi) S Siq x Gq (5)

q=1

In which:

- Cmi : Direct cost of machine and equipment use;

- Kmi : Set norm of ratio of other machines to main machine used for survey job i;

- Siq : Set norm of number of shifts of main machine j for one volume unit of survey job i;

- Gq : Price per shift of survey machine q according to the machine shift price table promulgated by provincial/municipal People's Committees.

2.2.2. General cost:

Pi = Cni x Kpi (6)

In which:

- Pi : General cost;

- Cni : Labor cost;

- Kpi : Norm of general cost of survey job, which is equal to 70%.

2.2.3. Pre-calculated taxable income shall be equal to 6% of direct cost and general cost.

2.3. Cost of elaboration of survey plan and survey result report:

The cost of elaboration of survey plan and survey result report shall be equal to 5% of the value of total volume of each survey job multiplied by the cost unit of each corresponding survey job.

2.4. Makeshift accommodations cost: This cost shall be equal to 5% of the value of total volume of each survey job multiplied by the cost unit of each corresponding survey job.

2.5. Value-added tax rate: The value-added tax rate applicable to construction survey jobs shall comply with current regulations.

3. MANAGEMENT OF SURVEY COSTS

3.1. Management of norms for construction survey cost estimation:

The norms for construction survey cost estimation shall be promulgated and guided by the Construction Ministry for application throughout the country. For construction survey jobs for which norms have not been promulgated or for new construction survey jobs (which are subject to application of standards, procedures and processes different from current regulations, for which new construction equipment or methods are used, or which are performed under different geological and topographical conditions), investors and construction survey contractors shall base themselves on technical requirements, construction methods, construction conditions and methods of norm elaboration to determine norms for these survey jobs or to apply similar norms already applied to other works for determining costs of construction surveys called for bids. The above-said norms shall be sent to the Construction Services of localities where works are to be constructed, the Construction Ministry and concerned branch-managing ministries for supervision and inspection. In case of appointment of construction survey contractors, investors shall have to send these norms to the concerned branch-managing ministries or the Construction Services of localities where works are to be constructed for the latter to reach an agreement with the Construction Ministry before promulgation and application.

Provincial/municipal Construction Services and branch-managing ministries shall have to gather norms not yet included in the current system of norms and annually send them to the Construction Ministry for study and additional promulgation.

3.2. Management of construction survey cost units:

Construction survey unit costs shall be elaborated according to survey cost estimation norms promulgated by the Construction Ministry or promulgated under the Construction Ministry's agreement. Provincial/municipal Construction Services shall assume the prime responsibility for, and coordinate with concerned Services in, elaborating and reporting to provincial-level People's Committees for promulgation construction material, labor and machine shift price tables suitable to local markets' specific conditions, serving as a basis for the elaboration of unit costs and adjustment of survey cost estimates. Construction survey unit costs applicable to provinces shall be elaborated on the following bases:

- Table of prices of survey materials transported to construction site, fixed under the guidance of the Finance Ministry and the Construction Ministry on notification and control of prices of construction materials in construction investment.

- Table of construction survey labor costs, fixed according to the minimum wage, grades of survey laborers and various allowances based on the minimum wage and grade wage in localities, additional wages and some other costs which can be directly contracted in package to laborers under the guidance of the Construction Ministry's Circular No. 04/2005/TT-BXD of April 1, 2005, guiding the elaboration and management of costs of work construction investment projects.

- Table of survey machine shift prices, fixed under the Construction Ministry's guidance in Circular No. 06/2005/TT-BXD of April 15, 2005, guiding methods of elaborating prices of construction machine and equipment shifts.

Depending on their local conditions, provincial-level People's Committee presidents may decide to add survey labor and machine costs on the principle that the minimum wage to be paid must not exceed twice the Government-stipulated general minimum wage for elaborating and adjusting survey unit costs applicable to their provinces, and concurrently report the results to the Construction Ministry.

The transitional elaboration and management of construction survey costs shall comply with the provisions of the Construction Ministry's Circular No. 08/2005/TT-BXD of May 6, 2005.

This Circular takes effect 15 days after its publication in "CONG BAO" and replaces the Construction Ministry's Circular No. 07/2000/TT-BXD of July 12, 2000, guiding the elaboration of construction survey unit costs and management of construction survey costs. All previous regulations which are contrary to this Circular are hereby annulled.